>> ben? >> i like the index. bless you, charles. i hope you get to be rich if you're not rich already. come live near me. >> i want to. that's goal. >> fox continues right now. >> i have made it clear to the intelligence community that unless there is a compelling national security purpose we will not monitor the communications of heads of state and government of our close friends and allies. >> that was president obama pledging nearly two years ago to stop spying on allies. a new report saying the administration kept nsa surveillance on our closest allies including israeli prime minister benjamin netanyahu and some of our own lawmakers. their conversations got swept in with the snooping. some here say we should be paying the nsa to spy on our enemies, not on our friends and neighbors. are they right or wrong? hi, everybody. happy new year.

welcome to "forbes on fox." let's go in focus to find out with steve forbes, mike ozanian, sabrina schafer and david mercer, former deputy finance officer for the dnc. steve, wasn't it a direct violation of the president's pledge not to spy on allies? >> it was. but this president doesn't pay attention to such niceties. in terms of allies he probably didn't consider israel an ally at all, certainly not by his behavior. the fact he let a congress be swept into this is a shocker. shows he thinks congress is a toothless tiger. sometimes you have to spy on an ally like in the early part of the last decade on schreuder who was close to putin in doing strange things. unless you have exceptional circumstances it should be hands off. >> what bothers the israelis most is they were specifically

target i targeting benjamin netanyahu because he disagreed with the iranian deal. i spoke with a former israeli ambassador on this earlier. let's play the tape. >> i hope there was no cyber implant. that would be an invasion of privacy and a disgusting act, not only, you know, from the u.s., but against such a close friend. >> so they really object to that specific targeting in a private office of an ally. >> i think if i were in their shoes i would be more mad we didn't know there was a cyber device in the prime minister's office. that's what i could be concerned with. secondly it wasn't just netanyahu. it was president ehrowan of turkey. as a nato ally was kept off the list as b.b. was with regard to eaves dropping. and the purpose of it, specifically which had the ascent of members of congress, i

might add, was to in the discussions or talks on the iran deal there was also the concern that israel might take a preemptive strike against iran. in that instance it was deemed necessary -- >> we all remember that. >> -- to check into that surveillance. >> of course, david, we should emphasize and i will go to e-mac, what's most troubling in this is that u.s. congressmen and congresswomen were swept into this spy net they threw out and some of their private conversations just as pending legislation on the iran deal was being discussed the president may have been able to use some of the private information from u.s. congressmen through the nsa to make his own plans to combat their views. >> yeah. that's against the separation of powers. >> that would be an unprecedented abuse of power. you're right. it is an issue of separation of powers there. the white house needs to get in

front of this and say, we are not spying on members of congress. now members of congress are saying we want answers. we mayle hold hearings on this starting next week. senator dianne feinstein is saying this is not the way to go. pete huckstra is upset about this. you could see action from congress retaliating. >> dianne feinstein is a democrat, of course. mike, in fact, the chair man of the national oversight committees has sent a letter to the head of an intelligence agency saying the reports raise questions concerning the process that nsa employees follow in determining whether intercepted communications involving members of congress and the latitude agency employees have in screening communications with members of congress for further dissemination within the executive brachblg. the president is not allowed to use spy agencies that weal all pay for to spy against his political enemies inside the u.s. >> good luck with that

investigation. we saw where the investigation into the irs went. we saw where the investigation into hillary clinton's e-mails went. stonewall, stonewall. even before it has a chance to have getting anywhere, president obama will be long gone. >> it's our money. we are paying the nsa a lot of money to keep us safe, spying on u.s. congressmen doesn't fit that bill. >> no, and it's not simply the lawmakers being spied on but pro israel groups having conversations of the citizens the government was spying on. it gives legs to senatorle paul in the run for president now. he's saying we have to be much more vigilant with all of the spying programs to make sure the surveillance isn't this dragnet surveillance but targeted and legal surveillance which clearly this was not. >> we tried to get the budget of the nsa. we couldn't because it's classified. as it becomes more involved in domestic affairs, if this isn't

stopped maybe it shouldn't be classified. maybe we should know how much they spend and get involved. the congress should, in deciding how they spend the money. yeah. i think any time government is spending money it should be declassified. we should know this. my bigger question is what would we care about what's on the mind of world leaders? we know how inept ours are. would anyone care what's on the mind of joe biden or nancy pelosi or the other clowns in washington? end the program. it probably doesn't give us actionable intelligence and only succeeds to offend other countries. >> the president got his iran deal through. maybe somal of the ways he was able to do that was based on conversations he was listening to from u.s. congresspeople. >> yes. they were, in effect, spying on congress and the israelis t. idea they wanted to know if the israelis would take preemptive action. they almost did it three years

ago. this is long past the idea they would take military action. obama wanted to get the deal through congress. he didn't care if he trampled on the constitution to do it. >> it was richard nixon. he wasn't actually impeached. one of the charges is he was using intelligence agencies of the united states to go against political enemies. seems like there might have been some of that here. >> i would say that's not what was going on, nor was it any intention. as i mentioned earlier, this had the ascent of members of congress. >> hold on. you're right. the original spying to make sure there wasn't a preemptive strike by israel did but that was before the president made the pledge to stop it. congress approved it is spying. >> they did on this spying and i will also add that the israelis were spying on the u.s. and using that information to

lobby members of congress, into fear in our domestic affairs. >> people spy on people all the time. you're not supposed to use spying agencies to go against members of congress. that's the point here. that's what happened. >> we don't know the facts about it. this is breaking new ground if the white house is spying on members of congress. that's a huge shocker. i agree with mike there would be stonewalling. in terms of a hearing they need to get to the bottom of it. >> they do. coming up next, a white house new year's resolution -- release more gitmo detainees. will it put our lives and our livelihoods in greater danger in the new year? we debate, you decide coming up next.

it's a new year and one of the first things on the administration's checklist, releasing more gitmo detainees. 17 set for release this month alone. steve, you say this is a threat to the security and our economy. how so? >> well, dade, it sends a terrible message to the world that we are not serious about the war on terror. you get economic prosperity, one of the conditions is a sense of safety and security. when everyone is looking over their shoulders waiting for the next attack, hunkering down that takes away the animal spirit. it hurts the security, economy. bad deal all around. shows this man is not serious about fighting islamic terrorism. >> david, here's what the former defense intelligence agency director general mike flynn had to say about gitmo and the release of prisoners. play the tape. >> we need to be capturing more

of these guys and putting them into long-term sentences where they might never see the light of day. >> to which you say what, david? >> i say what major general michael lennert says, kissinger, colin powell and others that it should be worked to close gitmo. as the major general pointed out who is the actual one that opened up guantanamo who in january this year said that he regrets opening it and wants it closed. as far as economics, you know, look, as far as i know, they are not paying for room and board. the detainee s aren't paying for room and board. the economics of paying for gitmo is pretty crazy. >> e-mac, we have had shows before we talked about the economics of closing it. there is a big cost there, too. one other thing we should mention is the re-citivism rate

of 30%. that's high. >> one in three now. it was one in seven a few years ago. people in the pentagon say keep it open. steve the right. we have a lot of hard-core terrorists there. we have three former defense secretaries saying the president's approach to foreign policy has not been state of the art. we have the mideast in flames, a major refugee crisis. why do we think a decision to close gitmo is a piece that would be above the bad mistakes? it might be another bad mistake in the making. >> and even though a lot of the folks were locked up because of the affiliation with al qaeda, they are going back and getting affiliated with isis which is behind terror attacks either through encouraging people to do it or direct control and command. >> absolutely, david. that brings the conversation back to why we have gitmo. there is a reason for it. we need a place that's not stateside to hold the prisoners,

to close gitmo it would be estimated at $600 million. where will we put people? in kansas at leavenworth? i don't think so. a lot of things keep me up at night. this isn't one of them. the president said to hell with everything else. i will do what i want to do which is to let the prisoners go. >> one thing i find troubling about this is that the president said he was going to come up with an alternative plan to gitmo and would submit to congress. he has never done that. i find that troubling. >> interesting. i wonder why it is. john? >> i'm glad to hear david mercer say with it applied to gitmo government spending is an economic negative. i wish the left would say that about everything else government does that holds down growth. applied to gitmo specifically, look. i don't know. but i don't want them to shut it down if, in fact, it's going to release a lot of dangerous tariffs. if, in fact, it's succeeding

from keeping people from harming us, why close it? >> but, steve, there seems to be fair amount of evidence. a lot of people have gone back. now they are working with isis. >> that's right. again, it shows that we are not serious about fighting this thing. we shouldn't be releasing prisoners of war until it is over. putting people in the united states makes the towns where the prisoners would be targets of terrorism. it will increase our insecurity, not decrease it. would you feel comfortable living next to a prison that housed one of the terrorists? >> i would feel as comfortable as i do living near a prison that has domestic violators or criminals. as many cities do. if i may make a point here, it was president bush -- okay, it's not just obama alone. president bush let or released 520 former detainees.

that 30% resit vimpl rate is with president bush's releases. >> right, but -- >> hold on, david. >> what you're saying is -- [ all speaking at once ] >> it is a bit of argumentative relativism. we are saying stop future problems by keeping the bad guys under lock and key. >> two wrongs don't make a right. >> the "cashin' in" gang is ready to roll at the bottom of the hour. eric, what do you got? >> waging war on isis by taxing americans even more. hold onto your wallet. we are kicking off 2016 with that hot debate. plus one of the biggest pinocchios of 2015 and some elected officials helped spread it. find out what it is. >> we'll be watching. up here first a tax hike going up in smoke in new york. could it be a lesson for d.c. that could save us all big money? the new year? we'll explain next.

no butts about it. new york state's cigarette revenues are going up in smoke. tax collections dropping by $400 million over the last five years. it happened after the state jacked up taxes on cigarettes. take a look at the flip side. you may think it would go in the opposite direction. the cigarette tax zoomed up from $1. 50 a pack to $4.35 a pack. look what happened. just as they raised the cigarette tax the revenue from

that stream went down about $400 million. coincidence? >> i think not. this is so right, i love it. it brings a big smile to my face in the new year. there are all these do-gooder regular gla tors who want to control everything we do, put in our mouths, smoke, food, everything else in between. the reality is it's coming back to not help them. that's great. i love that consumers are finding a way around it. whether or not any city will pay attention is doubtful. >> there is another point to be made here which is a supply side point. i know the term has been dragged through the mud over the past few years. le in some cases when you raise tax rates you get less revenue. as clinton proved in 1997 he lowered the capital gains tax with the republican congress and guess what happened. within a couple of years they had 70% more revenue from capital gains. >> you also -- that's a good

example. you have other examples you see today with the same promises or claims by governors in new jersey or kentucky or wisconsin that promise by lower corporate taxes you will get more jobs which we know those three states are hurting in job creation. i think it's not just in lowering taxes here regarding new york. it's what their neighboring states are charging and if they are lower people will go buy a cheaper pack of cigarettes there than in new york. >> the point is and i thought david was on board for a second. the point is sometimes when you lower tax rates you actually get more government revenue and the reverse is true as well. >> absolutely. less is more. you see it in the case of new york and what big taxes end up doing is we must raise taxes everywhere and collect the money. you drive activity under ground or drive it away all together. less is more. >> it might be true for government. i'm glad when the government

gets less revenue. aren't you? >> absolutely. taxes are a price. naturally the high price drove away revenues for government. that's a positive thing. why we have fallen in love with the notion we should get a tax rate that gives government more revenues is something i will never understand. let's let new york state be idiotic if it wants to be. >> mike? >> you also get more economic growth when you have lower marginal tax rates and lower tax rates on investment. we see with this economy it's the worst recovery since the 30s. median household income is lower today after several years of a so-called recovery than it was in january 2008. the budget deficit as a percent of the economy is more than twice as high today than average during the bush years. >> you have been studying taxes for your entire career. what do you think? >> news flash. when alexander hamilton's first cigarette tax was abolished they found negligible impact on the budget. it didn't bring in a lot oh

revenues. we have known the story for 225 years. >> how about that for history? thank you very much. happy new year. coming up, find out which forbes informer had the best stock pick of 2015 and

here they are, ladies and gentlemen. our informers 2015 stock winners. e-mac wins with google. oz came in close with hasbro. now to their winning picks for the next year. >> welltower is a health care reit. impressive track record of increasing dividends. >> mike, do you like it? >> i suspect a big dividend increase this year. >> you're right on with hasbro. the guys who run the company

have been buying a lot of stocks. i will go and follow them. >> decent management. a little rocky period with earnings growth. ttttt for forbes on fox. happy new year, everybody. here's eric. >> a tax to take out isis? there is a push in d.c. for a temporary surtax to take care of the war on terror. do americans need to shell out more money to defeat islamic extremism? hi, everybody. welcome to "cashin' in." jonathan hoenig, michelle fields and jessica tarlov are the crew this week. as of november 30, the u.s. spent nearly $5.5 billion on the war against isis since 2014. no surprise democrats looking to tax us to keep us safe from terror. that $5 billion is peanuts compared to money we spend on liberal programs every year and they pale in comparison to keeping us safe. mi